Wetzel v. Equipment Dealers Credit Co.
United States Bankruptcy Court for the Western and Eastern Districts of Arkansas
274 B.R. 825 (2002)

- Written by Joe Cox, JD
Facts
Randy and Kimberly Davis (debtors) filed for Chapter 7 bankruptcy. The appointed trustee, Frederick S. Wetzell III (the trustee), filed an adversary proceeding against Equipment Dealers Credit Company (Equipment Dealers) (creditor) regarding the validity and priority of a lien claimed by Equipment Dealers against the bankruptcy estate. The Davises filed a loan application with Equipment Dealers in May 1999. Equipment Dealers claimed a security interest in a tractor and a front-end loader. In the loan application, the Davises stated that they lived in Clark County, Arkansas. In fact, they lived in Hot Springs County, Arkansas. Under Arkansas law, perfection required that the financing statement for farm equipment must be filed in the county of the debtor’s residence. Equipment Dealers filed a financing statement in Clark County but did not file one in Hot Springs County. The trustee argued that because Equipment Dealers had not properly filed, its security interest was not perfected and thus could be avoided by the trustee using his strong-arm power to avoid unperfect security interests. The trustee generally has priority over unperfected security interests but not perfected security interests, provided that those interest were perfected prior to the bankruptcy filing. Equipment Dealers argued that it acted in good faith in filing in the wrong county and that it should have priority.
Rule of Law
Issue
Holding and Reasoning (Fussell, J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.